College Planning Specialists: What the Nation’s 6 Largest Student Loan Providers Do NOT Want You To Know

In my last article, I began the process of throughly outlining what is one of the most overlooked yet greatest methods of financing a college education: College Planning Specialists. In previous months I have reported on the banking scandal that rocked University of Texas and other large institutions. This scandal involved the use of kick backs and illegal perks or payments made to large university student loan counselors. The trade off being those university officials would “steer” students and families into a loan program, from the kickback inducing bank, that was detrimental to the family.

In June of this year, Attorney General Andrew Cuomo of New York outlined and implemented a Code of Conduct plan for the 6 largest student loan lenders. Cuomo’s plan includes the following 7 provisions:

1. Ban on Financial Ties. Lenders are prohibited from giving anything of value to any college in exchange for any advantage sought by the lender. This severs any inappropriate financial arrangements between lenders and schools and specifically prohibits “revenue sharing” arrangements.

2. Ban on Payments for Preferred Lender Status. Lenders may not pay or give colleges any financial benefits whatsoever to get on a college’s preferred lender list.

3. Gift and Trip Prohibition. Lenders are prohibited from giving college employees anything of more than nominal value. This includes a prohibition on trips for financial aid officers and other college officials paid for by lenders.

4. Advisory Board Rules. Lenders are prohibited from paying college employees anything of value for serving on the advisory boards of the lenders.

5. Call-Center and Staffing Prohibition. Lenders must ensure that employees of lenders never identify themselves to students as employees of colleges. No employee of a lender may ever work in or providing staffing assistance to a college financial aid office.

6. Disclosure of Range of Rates and Defaults. Lenders must disclose to any requesting school the range of rates they charge to students at the school, the number of borrowers at each rate at the school, and the lender’s historic default rate at the school. This will ensure that schools will have the information they need to select preferred lenders who are best for students and their families.

7. Loan Resale Disclosure. Lenders shall fully and prominently disclose to students and their parents any agreements they have to sell loans to any other lender.

Look at these provisions carefully. Would you want to collaborate or become a customer of an organization that is being reprimanded for provisions 2 and 3. Essentially these are rules against kickbacks. Does it not make sense to search for an alternative to the stratospheric, exorbitant costs of college tuition loans?

What would you rather have as your plan to finance a student’s education: a high interest rate and long term loan that creates financial unrest for your family for years or a financial plan that allows you to take advantage of the millions of dollars of government financial aid that goes untapped every year?

Stay tuned as the series about College Planning Specialists continues with a closer look at the services and value they provide.

STOP Servitude to Banks Providing Tuition Financing: College Planning Specialists’ Plan to Break the Loan Cycle

In today’s world of financing for a college education, the awesome and frightening reality for many students and parents are the lack of solid tuition financing alternatives. The main method of paying for an education., outside full athletic scholarships or parents who can afford to pay without discomfort, are student loans through fiance companies bent on creating an interest rate bonaza to your detriment.

In step with the high interest rates and never ending loan pay off dates is the fact that college tuitions are simply a rip off. There is very little competition or what analysits call downward pressure on college tuition pricing. In a good example of this problem, Paul Streitz’s article “The Great American College Tuition Rip Off” outlines how parents and students push for higher education at the best colleges. This demand is manipulated by those colleges that receive the highest rankings from the US News and World Reports. US News and World Reports rankings have long been a respected measuring stick to parents and students helping them identify the best institutions.

Streitz posits that without tuition price competition from equally rated universities, and with demand escalating, universities will continue to raise tuitions. These cost increases are not caused by spiraling administration costs, professor salaries, or any cost of doing business factors. Instead the true explanation is simple: universities can and do raise tuition fee because students and parents are willing to pay the costs without question.

How do students receive academic scholarships when their parents economic standing disqualifies them from aid? And how do parents whose main assets are in property and whose income is just enough to keep their household afloat help pay for their student’s educations? Is it possible to “requalify” these families in such a way as to make them eligible for financial aid after all? The answer to the last question is a resounding YES!

Right now is the right time to look for alternatives to the traditional loan rip offs. Now is the time to investigate and engage with a new method to pay for college. Now is the time to contact College Planning Specialists.

College Planning Specialists provides a number of valuable services which in whole bring a new alternative to the traditional problem of qualifying for financial aid. The professionals at CPS Dan Evertsz and Gerna Benz provide expert analysis and an action plan that helps non qualifying (financial aid) families qualify under aid guidelines.

CPS’s Service Checklist is comprised of 24 action steps when implemented have a positive effect on qualifying a family for the millions of dollars, that go unused each year, of financial aid available. The first step is to outline a complete financial overview and analysis of a family’s assets as they relate to college as well as their budget. Analysis of the family budget, taxes, retirement and other areas of financial management gives a clear picture as to the best steps to take.

During this analysis, CPS will calculate the family’s Estimated Family Contribution (EFC). This form is a way to calculate how much a family must pay outside of the financial aid package that they qualify to receive. It is CPS job to help families understand this process, do the calculations for the family, and most valuable-provide a plan/and or recommendations to reduce the Estimated Family Contribution.

Why worry about the EFC when most families do not qualify for financial aid due to their economic standing? In many many cases Dan and Gerna have been able to find avenues for families to qualify for financial aid. Almost all of these families never thought they would qualify, never knew where to go to investigate these alternatives, and have nothing to lose by going through the College Planning Specialists consultations.

For more information please contact this blog or stay tuned for the Part 2 in my series: Stop Servitude to Banks. . .

10 Alternative Methods To Cut College Costs

The incredible costs of a college education has every parent and student concerned for their future plans. The following is a list of 10 methods to cut college costs. The list is provided by www.bankrate.com and it could provide help to those people looking for any room to breathe.

1. Get College Credit in High School: Students can take AP college credited classes, with the help of a knowledgeable counselor, which will help to cut down on the number of courses need to graduate from college. Most AP courses are paid for by the high schools so as not to deter students from enrolling.

2. Junior Colleges: If you can convince your student, spending the first year or two in college at a JC is a huge cost savings. In many cases, students have yet to declare a major. In these cases, general education requirements can be fulfilled at a JC. The cost savings in tuition, books, supplies, housing, food, and travel may give a student and parent a head start on costs for graduate tuitions.

3. Cash in on Tax Credits: “What students need to know is that there’s the Hope and the Lifetime Learning tax credits,” says Joseph M. Re, author of “Financial Aid Financer: Expert Answers to College Financing Questions.”

“If you play those right, you can pick up $7,000 from Uncle Sam (over a four-year period) to pay for college. The Hope credit provides a $1,500 tax credit for each student for the first two years of college, as long as you are the one paying for college — rather than the federal government or private financial aid. (Parents who claim the student as a dependent on their tax return would be eligible for the credit.) The key to taking advantage of this credit, Re says, is to plan ahead and be aware of the stipulations.”

4. Rewards for Public Service: Some organizations like Americorps, the Peace Corps and Teach for America all offer educational service awards to students seeking cash for college.

5. Work for the College: According to Susan Hall her job with the University of Richmond (VA) comes with the “school’s tuition remission program which allows her, her spouse, and any of her dependents to attend the university for free, provided that they have the grades and test scores to make it into the school.” The benefits are obvious.

6. Pay Lower Out of State Tuition: Due to the complexity of this strategy, I am quoting www.bankrate.com :

“Get an out-of-state education, pay an in-state price. That’s the beauty of the Academic Common Market. Designed for students who can’t find their desired program of study in-state, the Academic Common Market allows students from any of the 16 member states to enroll in an institution in another member state without footing an out-of-state tuition bill. Reciprocity agreements such as the Academic Common Market, the National Student Exchange, and the Midwestern Higher Education Compact (which allows students to attend out-of-state public schools in member states at 150 percent the cost of in-state public school tuition or offers a ten percent discount at out-of-state private schools in member states) are some of the best-kept secrets of the financial aid world. If you’ve got your eye on an esoteric program of study (18th century French architecture?) or are set on a certain out-of-state school, taking advantage of a reciprocity agreement can save you money.”

7. Refinance Your Home: The home is normally the greatest asset a parent can count on for quick cash. A cash out refinance can provide the majority of funds needed to get a student through to their degree.

8. Qualify Student as “Independent”: “If you qualify as an independent and your income is very low, you probably would be eligible for a Pell grant which would be for $4,100 and you would probably be eligible for an FSEOG grant which would be another $4,000,” says Joseph Re. An independent student therefore would have a much easier time qualifying for grant monies than a family with an income in excess of $50,000 per year.

* Consult your tax accountant or attorney on all of the strategies outlined here but especially this one.

9. Attend a “Work College” : Work Colleges allow a student to work a part time job at the university between 10-20 hours per week. The becomes an employee of the college and as such earn a sizable reduction in tuition costs. Check out the Work College Consortium.

10. Establish Residency in the State of your College choice: “If you really want to pay in-state prices, the best way to do that is simply to live in-state before you enroll in school. To establish residency, independent students or families (when students are dependent) must show proof of living in state for at least one year prior to enrolling in school. Remember to throughly check and investigate the requirements of each state/college in regards to residency. Check out The College Board’s Web site.

 

How Previlent are College Scholarship Scams?

College tuition costs have been running out of control for decades, as students and parents search for answers to how they will finance an education. The sheer desperation of this problem has spawned a growing concern amongst families: the college scholarship scam. The Federal Trade Commission along with the Department of Education have been attempting to police this growing problem. Part of their program is to raise awareness of the scams, what to look for in a scam, and how to avoid these predators.

According to the Federal Trade Commission (FTC), any good “huckster” worth his sleezy salt will tryout the following lines in order to get into your pocketbook:

* “You can’t get this information anywhere else!”

* “Your a finalist”. . . in a contest you never entered

* “We will do all the work”

* “I just need your credit card number or bank account number to hold this scholarship”

* “The scholarship will cost some money”

* “You have been selected by a ‘national foundation’ to received a scholarship”

* “The Scholarship is guaranteed or your money back”

If you or your family decide to attend a seminar on college financing or scholarships be aware of the following steps which may help you from making a big mistake:

* “Do a background investigation, via Google and other search engines, on the company providing scholarship help. Interview a financial adviser or guidance counselor. You may be able to get the same help for free.

*Take your time at the seminar, don’t rush to sign a contract on the spot, and remember that “great opportunities” are those that are not sold on a rakish pressurized basis. *

*Be wary of “success stories” or testimonials of extraordinary success. Stories related at a seminar are just unsubstantiated rumors. Ask for a list of at least three local families who’ve used the services in the last year.

* Do not purchase from salespeople who are unwilling or vague when answering your questions. If it feels funny and sounds funny it most likely is not right.

*Ask the cost of the service, the types of services performed, and the company’s refund policy. If this information is NOT in writing it is worthless to you the consumer.

The FTC recommends that parents consult a Certified Public Accountant before agreeing to any “scholarship” or group which claims to help students receive scholarship monies. Their preferred company is College Parents of America at http://www.collegeparents.org.

If you have any questions please contact either Dan Evertsz or Dean Guadagni at dean_guadagni@yahoo.com